GREEWICH, Conn. " A series of conflicting data points in the semiconductor market point to a summer slump and modest growth rates in the overall IC business, according to a report from American Technology Research Inc.
Last week, several chip makers, including Amkor, Exar, ISSI, Sipex and Trident separately lowered their quarterly forecasts despite what appears to be a robust IC recovery. This week, Conexant Systems Inc. lowered its forecast due to falling prices in the wireless local area networking market.
"Even before the slew of earnings warnings from 'second-tier' technology companies, there were sporadic reports about weakness in storage demand, NOR-flash memory pricing eroding, worries about handset sales in 2H04, and concerns about a pause in the PC market from the Grantsdale launch," said Erach Desai, an analyst for American Technology Research, in the report.
"Our field checks, over the past two weeks, also confirmed that (North American) distribution had slowed in May and through early June much like 'normal' summer seasonality would imply," he said.
Desai also said there is little doubt that year-over-year growth for this semiconductor cycle peaked in the first half of 2004. "A robust spring of hope has given way to a typical summer slump," he said. "We do not see broad-based evidence of a rollover in fundamentals, but rather moderation to a 15-20 percent y/y growth rate."
He added that the digital consumer/media, wireless handset, and industrial segments remain robust, while the networking and automotive markets are moderately strong.
The enterprise storage and PC markets are "vulnerable," he said. The PC business in general is questionable, thanks to the disruption and chip-set delays of Intel Corp.'s Grantsdale product, he said.